Semi skilled labour is paid at $6 per hour but is currentlyfully occupied on other projects. The remaininghours would be made up through overtime which would be paid at $12 perhour. (3) 4,000 hours of skilled labour.Skilled labour is paid a fixed weekly wage and there is currently sparecapacity sufficient to provide half the required hours. There isno other use for the material and it has a scrap value of $1.00 per kg. Thecompany currently has 600kgs in stock which was bought last month for$3.00 per kg although the current purchase price is now $3.50. Material A is regularly used in the company's other products. Thecompany currently has 2,500kgs in stock which was bought last month for$2.00 per kg, although the current purchase price has now increased to$2.15. The conversion would require the following: The company has the option of converting the product into a different version which it estimates could be sold for $85,000. A company has produced a made-to-order product for a customer at acost of $50,000, which was to have been sold to the customer for$120,000.
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